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2023 is sure to bring about a new wave of ESG and climate trends that businesses should start preparing for if they haven't already. The rapidly changing political and environment will influence demand for green technology, products and finance products. By keeping up on these trends, companies can stay far ahead of the game in terms of being ready for new opportunities and challenges related to ESG and climate matters that 2023 might present.

1. The energy crisis will strengthen investment in renewables

The ongoing war in Ukraine and high-inflationary environment may limit near-term pressure to reduce global greenhouse-gas emissions as governments prioritize energy security and affordability. But for many countries, increasing deployment of renewables is a more attractive route to achieving energy security.

What to watch in 2023: Which countries will be leading the renewable transition and which companies will be there to assist them?

2. Regulators turn their gaze to ESG funds

ESG-oriented funds have long operated with limited regulatory guidance.2 But regulatory interest in fund names and funds’ classification and disclosure obligations are ramping up globally. Spearheaded by the EU’s Sustainable Finance Disclosure Regulation, which imposes requirements on more transparent reporting for ESG funds, other major market regulators are following suit.

What to watch in 2023: Which companies will be forced to change their strategy as they’re held to stricter disclosure standards?

3. A push for deforestation-free

Despite commitments to halt forest loss,3 2021 saw tree-cover loss of 25.3 million hectares globally, an area larger than Great Britain.4 In addition, 2022 saw global wildfires burn down millions of hectares more. COP155 addressed such natural losses, while the European Parliament recently introduced legislation requiring products sold in the EU to be deforestation-free.

What to watch in 2023: Which companies will be exposed to deforestation and what will they do to adapt their supply chain and maintain access to key markets?

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